The Sequester, Air Traffic Controllers, and Republicans’ Magical Thinking

To anyone interested in how economism plays out in shaping U.S. policy, events of the last couple of weeks are a good example, as Congress found bipartisan resolve in telling the FAA to stop furloughing air traffic controllers and end flight delays—but without finding any new funds for the FAA.

A bit of background. It seems now to be clear that the more liberal economists, who warned that the increasing stridency of deficit-reducing talk on Capitol Hill boded ill for the sputtering economic recovery, are being proved right. Projections showed that the sequester would probably cause about 700,000 jobs to be lost in the public sector, and that this would slow down economic recovery. While the effects of the sequester are only just starting to be felt, the increase in payroll taxes from January is apparently already having an effect and is reflected in worse economic numbers—see several stories at nbcnews.com this past week, for example.

The effects of the sequester also have to be seen against the background of the total Federal workforce. A while back, in 2010, Ed O’Keefe at the Washington Post (sorry, they seem to have taken down the page) provided a calculation of how many civilian Federal workers there were under each president since Kennedy, compared to the size of the population. Between Kennedy and Carter, there were roughly 13 Executive Branch employees per thousand population. That started to drop with Reagan and now as of 2010, under Obama the number was 8.4. Put another way, between 1982 and 2010 the U.S. population grew by 34% but the number of Executive Branch civilian employees declined by 4%.

Liberals like me should be embarrassed by how many years could go on with these cuts in Federal workforce without any serious repercussions—suggesting that conservatives were right under Reagan to claim that the government was bloated. But the idea that you can simply cut and cut some more, and never will there be any damage done, has to be a form of magical thinking rather than rationality. In my work I have to follow what’s happening at the FDA, and the inability of the FDA to inspect foreign plants that make the chemical components of the American drug supply, and to be sure that foods are safe, has been increasingly well documented.

When the sequester was being considered, the FAA made it clear that under the rules, they’d have no choice but to lay off controllers and probably cause flight delays, as well as possibly unsafe conditions at smaller airports. The Republicans in Congress could not buy this. They assumed that every Federal agency has way too many workers, still, and that you could cut the budgets without harming essential services. They believed this was true not because of any facts, but because it has become an article of right-wing faith—smaller government is always better.  

So the sequester went into effect, and the furloughs occurred, and as predicted, bad things like flight delays happened—especially to business travelers, a group the Republicans worry about. With very little hesitation, Republicans joined Democrats in Congress and a bill to end the furloughs was immediately pushed through. Of course there was no increase in FAA funding; they simply allowed the agency more flexibility in deciding where to take the budget cuts. This almost certainly means that instead of important public services being cut in a visible way, services will be cut behind the scenes where the bad consequences won’t be obvious for several years. (And of course the other dire consequences of the sequester, that don’t hurt folks right away who are likely to vote Republican, remain unaddressed in Congress.)

Government services exist for a reason, and the public good (something that economism more or less denies exists) will be harmed when such services are severely constricted. The continuous cutback in the federal workforce since the 1980s argues for the danger that we’ve already reduced services to a dangerous extent. But if your magical thinking requires that cutting government spending is the solution to every conceivable problem, then you won’t be bothered by mere facts.

Economism as Religion—Krugman’s Near-Acceptance

Readers of The Golden Calf know that I cite Paul Krugman more than any other contemporary economist, perhaps because his New York Times column is so readily accessible, as well as because I think he usually makes the most sense. In that book I also had a bit of fun with Krugman because in earlier columns, he came right up to the main thesis of the book—that economism is really disguised religion, and not economics at all—but refused to go all the way to his own argument’s logical conclusion.

He’s at it again, as shown by his April 25 column, “The 1 Percent’s Solution” (subscription may be required):

http://www.nytimes.com/2013/04/26/opinion/krugman-the-one-percents-solution.html?partner=rssnyt&emc=rss&_r=0

He states in this column that the answers are now in—the so-called austerians are simply wrong in arguing that more austerity, rather than short-term economic stimulus, was needed to get the economy back on track after the big recession. Specifically, several authoritative reports favoring austerity have been recalculated and shown to be riddled with errors. So why, Krugman asks, is the austerity position still so widely proclaimed, and why is no one calling for more stimulus?

He has two answers. His main answer, as his title suggests, is that the wealthy find the austerian position to be in their selfish short-term interests, and what the 1 percent want is what the economists, by and large, proclaim to be true. (I guess those are the folks that donate the big bucks to the university economics departments and the economics think tanks.)

But along the way Krugman offers a second answer:

“

Part of the answer surely lies in the widespread desire to see economics as a morality play, to make it a tale of excess and its consequences. We lived beyond our means, the story goes, and now we’re paying the inevitable price. Economists can explain ad nauseam that this is wrong, that the reason we have mass unemployment isn’t that we spent too much in the past but that we’re spending too little now, and that this problem can and should be solved. No matter; many people have a visceral sense that we sinned and must seek redemption through suffering — and neither economic argument nor the observation that the people now suffering aren’t at all the same people who sinned during the bubble years makes much of a dent.”

In short, people want to make their economic theories match certain religious preconceptions about God’s plan for the world—exactly the thesis The Golden Calf offers for how economism is rooted in some major religious traditions, and functions logically like religion rather than economic science.

Economism and Human Robots: Why Seeing Life as a Market is Corrupting

            In the previous post I mentioned Evgeny Morozov’s recent book, To Save Everything, Click Here: The Folly of Technological Solutionism (http://www.amazon.com/Save-Everything-Click-Here-Technological/dp/1610391381/ref=sr_1_1?s=books&ie=UTF8&qid=1364074203&sr=1-1&keywords=evgeny+morozov+solutionism). While Morozov focuses on the Internet, one passage especially helps us see the flaws in the sort of thinking that characterizes economism.

            As I explained in The Golden Calf, one feature of economism is viewing all human behavior as a sort of market exchange, and arguing that economic laws should govern all social policy. Philosopher Michael Sandel, in his What Money Can’t Buy: The Moral Limits of Markets (http://www.amazon.com/What-Money-Cant-Buy-Markets/dp/0374203032/ref=sr_1_1?s=books&ie=UTF8&qid=1364075639&sr=1-1&keywords=michael+sandel+money+can%27t), calls this the move from having a market economy (which is perfectly fine)  to living in a market society (which isn’t).

            Morozov surveys the geeks who think that the Internet will solve all the world’s problems, even problems that aren’t really problems and don’t need solving, but there’s a great app for them. He finds that these geeks seem to have a love affair with rational-choice theory from economics and with providing various incentives and “nudges” to get people to behave the way social engineers want us to. He takes aim at what this approach does to social life and our sense of ourselves, worth quoting at length:

            “A scheme that wants to get children to help senior citizens by awarding them badges and game points is likely to produce very different children than a scheme that appeals to their civic duty, even if both schemes yield the same results. The problem with simplistic models imported from economics and rational-choice theory is that, whenever they tackle a novel case, they start with a new set of abstract, independent, and ahistorical citizens. Thus, children who were just helping senior citizens by playing games are forgotten and swept away, and a new set of children--like so many widgets and coconuts—is mustered up to engage in some different task, perhaps to solve math puzzles after resisting the cookies. But, of course, children can’t reboot the way computers can; we have the same children doing both—and their experiences accumulate rather than cancel each other out. Constructing a world preoccupied only with the most efficient outcomes—rather than the processes through which these outcomes are achieved—is not likely to make them aware of the depth of human passion, dignity, and respect. We don’t earn our dignity by collecting badges; we do it by behaving in a dignified manner, often in situations in which we have other options. Tinker with this spiritual pasture, and those options might go away—along with the very possibility of dignity.”

            Now, here’s a philosophical-ethical take on what the man just said. In ethics we have the old-fashioned ideas of virtue and character—that it matters what sort of person you are, and not merely how you behave at one moment in time. And what sort of person you are is shaped over a lifetime by how you are brought up and by your later experiences and values. Our goal ought to be to encourage folks to develop into morally good persons who are good citizens for our democracy and who treat those who depend on them well and responsibly. To encourage that, we have to understand the basic ideas of virtue and character, and how these are life-long attainments.

            The type of view that most undermines this concept of virtue and character is anything that reduces people to superficial packages of behavior and that forgets that people remain the same people over a lifetime, with what happened to them in the past helping to shape who they are in the future. It’s exactly such a view of replaceable, rebootable people that Morozov accuses the rational-choice-economics people of pushing on us. His conclusion: “[T]here’s something profoundly disgusting about this [rational-choice incentives] approach, for it not only tricks—rather than talks—us into doing the right thing but also gives us a fake feeling of mastery over our own actions….Trying to improve the human condition by first assuming that humans are like robots is not going to get us very far.”

The Danger of Applying Private-Sector Efficiency Standards to Government

            Evgeny Morozov’s recent book, To Save Everything, Click Here: The Folly of Technological Solutionism (http://www.amazon.com/Save-Everything-Click-Here-Technological/dp/1610391381/ref=sr_1_1?s=books&ie=UTF8&qid=1364074203&sr=1-1&keywords=evgeny+morozov+solutionism) is mostly about the Internet, but has a couple of points of value to the topic of this blog. There’s a similarity between economism and the view Morozov calls “Internet-centrism,” which he defines as a nearly religious worship of “the Internet” (as if the Internet is one thing), and an assumption that “the Internet” somehow embodies divine truth and natural law, so that instead of changing any feature of the Internet we find to be harming society, society has no choice but to get with the program and change its ways to coincide with “the Internet.” (Sound familiar?)

            One good point Morozov makes has to do with the relationship between private-sector standards of efficiency and government programs. It’s commonplace today, of course, to badmouth anything pertaining to government; but it’s especially common to look at the private sector, see what sorts of efficiencies are possible there, and then beat up government because its programs don’t demonstrate that same level of efficiency. And to most of us in America, any such argument makes perfect sense and needs no support or explanation. It’s just self-evident that if it wasn’t for government incompetence or corruption, anything in government would work just as efficiently as anything dine in the private sector. Just one more argument for turning all government programs over to private enterprise.

            But Morozov reminds us, “Most public institutions should not be held to the same standards as their private counterparts simply because their mission is to provide goods and services that markets cannot or should not provide.” We might grumble about the post office all we want, but the fact remains that no for-profit firm is about to deliver letters, in a few days, to any address in the country, and do so for a price that almost everyone in the country can afford, with a near-100 percent chance to the letter getting to where it’s supposed to go.

            Champions of economism, however, love to take advantage of our sloppy thinking on this point, as we then use the lack of ideal efficiency as further reasons to distrust government. Morozov quotes Catherine Needham: “The fundamental danger is that consumerism may foster privatized and resentful citizens whose expectations for government can never be met, and cannot develop the concern for the public good that must be the foundation of democratic engagement and support for public services.” And he adds, with a further quotation from Matthew Flinders, that “treating citizens as consumers leads them to think that politics can deliver the same ‘standards of service that they would commonly expect from the private sector…[which] is the political equivalent of suicide.’”

            If average citizens get disgusted with government because it fails to come up to some impossible standard of efficiency, they’ll ignore politics, which is just what economism-boosters want, so that the lobbyists and technocrats can take over and run government in the way that favors the corporate world. Anyone who visited Great Britain during the early years of the Margaret Thatcher regime saw this program in action—the Thatcher recipe was to cut funding for Britain’s public services, so that they’d deliver poorer and poorer performance for the average citizen, to get them demanding change, and therefore allow Thatcher to announce that the only solution to the problem was to privatize all these programs.

            It’s hardly popular today to try to re-educate all of us to realize that private-sector standards of efficiency might not be the right way to judge government programs that serve needs that the private sector doesn’t want to touch (except maybe to cherry-pick the few parts that turn a nice profit, and let all the rest go to seed). But then, it’s not popular to try to educate people about the illogic and flaws of economism generally.

It’s the Jobs, Stupid: Economism and the Sequester

            President Obama devoted his weekly radio address to warning of the harm to the economy if Congress fails to avoid the budget sequester on March 1. The Republican response, by Sen. John Hoeven of North Dakota, said it was all Obama’s fault and the way to get the economy going is by creating jobs—for which the best recipe was to approve the Keystone oil pipeline. 

            In The Golden Calf, I tried to be bipartisan in accusing both Democrats and Republicans of being in thrall of the false ideology of economism. Since the book appeared and since the 2012 elections, it’s harder to appear even-handed in my comments. While they have yet a long way to go, Democrats are at least calling out the Republicans on their ideological excesses. The Republicans, with the Tea Party apparently fully in control, have by contrast become even more wedded to economism’s view of the world.

            As it seems more and more likely that the dreaded sequester (originally designed as something so terrible that neither party would actually allow it to come into effect) will actually happen, pundits have been rushing to reassure us that it’s not that bad after all—that it would not throw the nation’s credit rating into a tailspin the way the fiscal cliff threatened. Well, not that bad or that bad, take your pick, but no one seems to dispute that it would throw a bunch of people out of work as a result of across-the-board cuts in government spending. In an economy only slowly recovering from a major recession, and where the recovery in the job market has notably lagged behind the rest, that seems a dumb move, especially for a party that loves to attach the epithet “job-killing” to every piece of legislation they oppose.

            What is going on here seems to be a central tenet of economism—that taxes and government are automatically bad and that private enterprise is always good. This means that if government jobs are eliminated, that is always a good thing, no matter what the short term consequences. If you go with the supply-side version, cutting back government jobs will mean cutting taxes, which will mean more money in consumers’ pockets and more money in corporate coffers, which always in the end means more jobs in the private sector than ever would have happened with higher taxes and more government regulation. So any short-term loss of government jobs is only a small and temporary price to pay for long-term prosperity. The fact that the economism recipe has, in the past four decades, failed to produce the promised prosperity for anyone but the fabulously wealthy is conveniently set aside.

            When I hear devotees of economism denouncing government jobs and extolling private-sector jobs, I always think of the local grocery that I frequent. People fill their shopping carts and head to the checkout lines, carrying the wads of cash they need to buy the groceries—a steadily increasing wad of cash, which I keep puzzling over as everyone says that inflation is dead. I imagine the store manager walking up and down among the checkout lines demanding to see the color of the customers’ money.

            The folks with decent, good, private-sector jobs have bright green money, and those the manager welcomes heartily and waves through to the head of the line. But those who are cursed with government jobs—at least the way economism sees it—carry a different color of money altogether. It looks gray and slimy. The manager sees that money and says, “Yuk! Don’t bring that slimy yukky money into my store! Get out!”

            Of course this economism nightmare world is not the way the store works at all. Somehow, those with government jobs and those with private-sector jobs get paid with the same color money. And the grocery manager is happy to see all the money, no matter what the source, come into his store. And when that money is spent it creates more jobs all up and down the line. And the economy (at least temporarily) gets a boost.

            But the die-hard economism champion protests that the private-sector job is real work, while the government job is silly make-work, not a real job at all. Tell that to a policeman or fireman. Tell that to an elementary school teacher. Tell it to a food safety inspector.  Or tell it to the clerk at the IRS whose processing of your tax form stands between you and your refund.

            How firmly economism sits in the Republican driver’s seat is indicated by one aspect of the sequester.  The people who invented this instrument, who in hindsight appear to be such political geniuses (not), figured out that one of the things that made it foolproof was that it cut both domestic programs (which the Democrats would never stomach) and the defense budget. Republicans always rise to defend Pentagon spending, assuring their cooperation with Democrats to do something sensible to cut the deficit in order to avoid the sequester.

            What happened? Well, it’s probably complicated, since recent polls, we’re told, show that defense budgets are quite unpopular with the American public just now so a politician voting to reduce defense spending may not be taking on much of a risk.  But added to this is economism. The Republican Party has apparently gone so far down the road of ideological opposition to government spending and government jobs of any sort that even the once-sacred Pentagon budget is no longer safe from them.

            And so we end up with the spectacle of a Republican senator saying that what we need to bolster the economy is more jobs, and then, apparently, preparing to vote to lay off thousands of workers. Economism tells us that this is perfectly logical.

Catastrophic Care: A Serious Problem and an Economism-Restricted Answer

            A colleague of mine asked my opinion about a recent article in The Guardian newspaper in the UK, reporting the appearance of a book by David Goldhill, Catastrophic Care: How American Health Care Killed My Father—and How We Can Fix It:

http://www.guardian.co.uk/commentisfree/2013/jan/28/us-healthcare-parents-lingering-death

As I did not have time to acquire and read the book, I turned instead to the article Goldhill wrote for the Atlantic Monthly in 2009, which appears to have been a brief synopsis of what the book contains:

http://www.theatlantic.com/magazine/archive/2009/09/how-american-health-care-killed-my-father/307617/

Goldhill is a businessman, as he tells us, and not a health policy expert. So when his 83-year-old father died after being admitted to the hospital with pneumonia, spending 5 weeks in the ICU and getting complicating infections one after the other, despite what seemed to be smart and compassionate physician and nursing care, Goldhill went to work trying to figure out for himself what was wrong with this system. First he made a catalog of all that he found wrong with the way US health care is organized; then he proposed a solution that seemed to make sense to him as a businessman. His assessment of the problem is largely on target, so I want to talk only about his solution, which shows what happens when we put on the blinders of economism.

Briefly, Goldhill favors a system where we’d each buy (or be given by the government if we were too poor to afford it) a health savings account to manage predictable, normal health expenses, plus a catastrophic insurance policy to cover unforeseen emergencies. This is basically the health savings account idea as its advocates call for it today. He’s sure that if we restored the consumer to the driver’s seat, we’d have a system that actually responded to consumer needs and no longer wasted huge sums of money while providing unnecessary or error-ridden “care.”

An obvious rejoinder is, first, that this assumes that health care can be tamed by a healthy dose of free market competition, while smart economists ever since Kenneth Arrow back in the 1950s have piled up lots of reasons why the market will not and cannot work in health care. Second, while errors and hospital-acquired infections are too-common problems all over the world, most other countries control costs much better than we do, yet none of them has found the health savings account, or the consumer-driven model, the right way to do this. So Goldhill needs to explain why the US is such an exceptional case.

Goldhill’s article in The Atlantic in fact mentions the existence of any country besides the US only twice.  He briefly considers the pros and cons of a single-payer health system, but decides it’s no good, first, because it would be “Medicare for all” and Medicare has been unable to control costs effectively (which might be precisely because Medicare is not the only game in town, and could control costs much better if it were). Second, he notes that the health costs have been rising in other nations and not just in the US. That’s true, but the steepness of the curve is generally less in those other countries, again showing that a single-payer system does not merely lead to administrative efficiency savings; it also gives the health system leverage over prices generally in a way that can constrain costs more effectively than our patchwork nonsystem.

The only other place he mentions any other nation is to note that the US has a lot more MRI scanners than countries like Germany—only to go immediately to the conclusion that more free-market competition in the US would take care of that.

This article is a good example of how one can do a reasonable job of deciding that a problem exists and why; and yet be so severely constrained by economism as a belief system that one cannot see anything like a wide range of solutions. (Since Goldhill is obviously suspicious of the US health insurance industry, you’d think he’d also be suspicious of the idea of health savings accounts—since the only people pushing them are conservative-economism ideologues, and lobbyists for the big insurers who know they can make a mint off HSAs.)

If you’ve been following this blog, you might imagine that I’m simply beating up again on Republicans. So I should add that Goldhill admits in his article to being a Democrat. Economism, it seems, is a bipartisan affliction.

Racism and Economism—Cozy Bedmates

            A talk with colleagues recently sent me back to the book by Michael K. Brown and several colleagues, Whitewashing Race: The Myth of a Color-Blind Society (University of California Press, 2003). The Introduction to their volume is an excellent discussion of the phenomenon of what scholars call “whiteness,” the privileges that whites enjoy by living in our present American society, which is invisible to the whites because they don’t see how it is built on systemic discrimination aimed at nonwhites. What I want to talk about in this blog post is how closely the conservative response to the challenge of “whiteness” relies on economism as its fundamental ideology.

            Brown and colleagues spend most of their Introduction addressing what they call “racial realism,” the position advocated primarily by conservative opponents of affirmative action and similar government programs. Racial realism, they say, claims three things:

·         Contrary to the liberal myth that America is basically racist, the country has made great strides in rectifying racial inequality in recent years, so the problem has been solved and we really need to move on.

·         Any persistent inequalities in income, employment, housing, health care, etc. can no longer be explained by white racism and must be due to unwise, irresponsible choices made by individual people of color.

·         Current failures of the civil rights movement are caused by the self-serving behavior of its leaders, who don’t serve the interests of their constituents and merely want to keep themselves in power.

Brown et al’s book is basically a set of essays designed to refute all these claims, and they briefly go over the evidence against each in their Introduction. In the process of refuting the claims, they make clear how much those making the conservative case rely on the belief system of economism.

            A central tenet of economism is that if you’re poor, you got that way through your own individual actions and not because of any institutional or systemic factors; and if you’re rich, you got that way because of your own hard work and responsible behavior. So the most threatening thing to say to any economism true believer is that a person might be hardworking and deserving and still end up poor, or vice versa. Therefore, any suggestion that our society remains racist, so that blacks have an automatic disadvantage that’s outside of any individual’s control, has to be fought off with everything in the economism arsenal (like assembling all the evidence of progress toward racial inequality, and ignoring the mountains of evidence on how much inequality still exists).

            The second major belief of economism is that the free market is the solution for all human problems, and government regulation always makes a problem worse. If despite some recent progress (which Brown and company hardly deny), America today remains rife with institutional racial prejudice, it seems pretty clear that the marketplace has not fixed it and that the only way to level the playing field is through some form of government policies. But such a conclusion is simply not acceptable to this group of thinkers, so they need to deny the problem rather than admit the possible need for solution (just as they have done with climate change).

            Brown and colleagues, in passing, tell a story that I think goes to the heart of the claims of “racial realism.” Prof. Andrew Hacker, in his book Two Nations (Ballantine, 1992), describes an experiment he performed with his white college students. He asked them how much money they would demand as fair compensation if they were to be changed from white to black; and they replied that they’d consider it a fair deal if they received $1 million a year.

            I assume that as part of this experiment, the students took for granted that they’d stay the same people in all other aspects of life other than skin color. That is, if they had succeeded in college thus far by hard work and responsible behavior, they’d continue to act that way after the color change. So if racial realism was a true description of U.S. society, they might see the level of disadvantage they’d face as something easily compensated for by much less than a cool million a year.

            Obviously, these students, based on their own up close and personal view of how society works (and perhaps also informed by looking into the secret recesses of their own racial thinking) were having none of this. They knew how little all their individual good behavior, and positive upbringing in white schools and white homes, would count as soon as they could be found guilty of “driving while black,” or went out on the job market as a black person, or went to see a doctor or got admitted to a hospital.

            The Hacker experiment should be especially persuasive to believers in economism, because it’s a free market answer. He got a free-market estimate from his students as to the actual cost of being black in America.